Even demise of major rival can’t halt Trinity Mirror profit plunge

Daily Record profits still suffered despite demise of NotW. Picture: Neil Hanna
Daily Record profits still suffered despite demise of NotW. Picture: Neil Hanna
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STRONG Sunday sales following the demise of the News of the World failed to halt a 40 per cent slide in profits at Daily Record and Sunday Mail publisher Trinity Mirror.

The group – which also owns 160 local and regional newspapers including the Ayrshire Post and the Stirling Observer – said yesterday that revenues declined by 2 per cent in 2011 to £746.6 million, with profits down to £74.4m as higher newsprint costs took their toll.

Chief executive Sly Bailey, who has had her pay frozen this year, said: “Without the impact of £22m of additional costs due to newsprint price increases, adjusted operating profit would have increased year on year.”

The closure of the News of the World in July following the phone hacking scandal boosted circulation revenues at Trinity’s nationals division – which includes its two main Scottish titles as well as the Daily Mirror and Sunday Mirror – by 10.2 per cent in the second half of the year. A strong performance from the Sunday titles countered falling sales of the daily newspapers.

But the group said the recent launch of a Sunday edition of rival tabloid the Sun will contribute to an expected 1 per cent year-on-year sales fall in March across all its national titles.

The group warned that advertising revenues are expected to fall 12 per cent in the first three months of this year.

Numis analyst Lorna Tilbian said a combination of weaker advertising trends and a lower expectation on circulation for the nationals division will offset the benefit of a higher margin gained by cost-saving measures.

The group made £25m of savings during the year, including cutting jobs and changing regional titles including the Liverpool Post from daily to weekly publications. A further £15m of savings are planned this year.